For those who do not know, I have always preached that socialism is a colossal failure, and that capitalism is a spectacular glorious success. Capitalism creates and spreads wealth, and socialism creates and spreads misery.
The pilgrims experimented with socialism in the 1600s. It failed. They then tried capitalism, and lo and behold, it worked. This has been the case with both philosophies in the ensuing 400 years.
Yet I am forced to admit by the overwhelming evidence in front of me that there is one aspect of society where socialism has succeeded. The National Football League is a socialist model, and it works.
Former Cleveland Browns and Baltimore Ravens Owner Art Modell once remarked that the NFL Owners were “32 republicans who vote socialist.” He also ruefully remarked that, “The President can bomb a nation with a simple bare majority, but NFL Owners need a 3/4 majority to go to the john.”
One does not need to understand anything about football itself to understand the NFL business model.
First of all, the league has a unique revenue sharing arrangement. Revenues from the ticket sales to the games are split equally between all 32 teams. Additionally, the NFL makes most of its money not from people attending the games, but from television. The NFL has a multibillion dollar television contract, and that is also split equally between all 32 teams.
The ramifications of this revenue sharing is that small market franchises such as the Green Bay Packers can compete with large market franchises such as the New York Giants.
There are some chinks developing in this model, but they are being dealt with. Revenue from luxury boxes is not shared equally, but in due time every franchise will have luxury boxes, nullifying that advantage. Also, some franchises, such as the New England Patriots and Dallas Cowboys, have owners who own not only their teams, but the stadiums those teams play in. This is critical with regards to advertising revenue. If the NFL has an official contract making Coca Cola the official league beverage, no team can promote Pepsi. However, while Jerry Jones as the owner of the Dallas Cowboys cannot promote Pepsi, Jerry Jones as the owner of Texas Stadium can.
However, even if some owners make more than others, the NFL has one other element of socialism that works…a hard salary cap. Each team is allowed to spend the exact same amount on players. There is a minimum that must be spent, since some owners would prefer to field losing teams in order to line their pockets. The minimum forces them to try and compete. The maximum forces teams to make hard choices. Individual players can still earn astronomical salaries, but at the expense of their teammates. The term “capanomics” refers to teams that try to temporarily circumvent the cap using creative accounting methods, but when that credit card bill comes due, teams have a fire sale known as “salary cap hell.”
Major League Baseball is raw capitalism. Several years ago, the New York Yankees had a player payroll of 200 million dollars. The Montreal Expos had a player payroll of 9 million dollars. You read that correctly. Why should someone play for one million for the Expos when the Yankees would pay 20 million? The result is that the Yankees are perennial contenders for a championship, and the Expos now cease to exist.
The main issue then becomes why this is all relevant. How can one endorse capitalism in business yet endorse socialism in professional sports? Isn’t this hypocritical?
No it is not. The ultimate goal is successful ventures. One cannot have liberty and equality. They are in direct conflict. In American society, especially in business, liberty is the key. The profit motive is a powerful incentive. People do not want to work harder unless they believe they will be rewarded more for that hard work. If I can get the same pay as my neighbor for doing less work, perhaps personal pride or ego would allow me to work hard. However, if I choose the lazy route, my neighbor has no recourse.
In professional sports, equality is the key to success. Some mistake the NFL for being obsessed with parity, aka mediocrity. However, the correct phrase is not parity. It is competitive balance. Parity would mean having each team finish around 8-8. This is the type of socialism that destroys most societies. Competitive balance is what brings the phrase “any given Sunday” into the American lexicon. An 0-6 team can go on the road and defeat a 6-0 team. Every week in the NFL something like this happens. The 1998 Rams went 4-12. The 1999 Rams won the Superbowl. The irregular becomes the regular in the NFL. Mismatches on paper become shocking upsets, as ESPN uberannouncer Chris Berman reminds us that, “That’s why they play the games.”
So why can’t the rest of the world take socialism and make it work the way the NFL has?
The answer is that the world does not have an undisputed governing body to enforce regulations and punish cheaters. It is why the Kyoto treaty went down in flames. It is why the European Union, filled with socialist nations, is failing. The stronger nations do not want to be dragged down by the weaker nations. One can argue that the stronger nations could lift up the weaker nations, but if even socialist countries do not believe this will work, what does that say about socialism itself?
The NFL has two powerful elements. The first is labor peace. The unions and management work together on many issues. There has not been a work stoppage in two decades. Gene Upshaw, the head of the NFL Players Association, often testifies side by side with the NFL Commissioner on league matters. They socialize together. Brinksmanship is rare, and getting a deal done to ensure labor peace is paramount. It helps that the revenue sharing agreement forces owners to be united. Contrast this with baseball where the owners have incentives to cheat each other, so they do. Negotiations between the players and owners makes Fallujah look like a walk in the park.
The second element of the NFL is a strong commissioner. For the last four decades, from Pete Rozell to Paul Tagliabue to Roger Goodell, the NFL has had a commissioner whose word was and is law. Any player or owner that breaks the rules is punished, often severely. Michael Vick was one of the greatest players in the league. He broke the rules, and was suspended from the game. Bill Bellichick is one of the greatest coaches in the league. He broke the rules, and was fined and docked draft picks. Nobody is above the game of football itself. Some would consider the commissioner authoritarian, but the leader of the NFL can be fired. Also, the leader of the NFL cannot use the military to crush dissention.
The main reason socialism fails is because for it to succeed, everybody in the collective must buy into it. Money and other perks are given up in the present for a brighter day in the future. Since past experiences prove this brighter future to be a fraud, skepticism sets in as people begin to see the benefit of cheating. It has failed in the past, so people believe it will fail in the future, therefore it is sabotaged in the present. To try and ask people to ignore history and have blind faith in a system that has never succeeded is to ask people to go against human nature.
However, the NFL has a history of financial success. Owners may grumble from time to time about sharing revenues, but deep down they all believe in the system. There is simply so much wealth that the idea of jeopardizing that golden goose is heresy to owners that even briefly consider it.
The only criteria in judging a system should be results. Intentions are worthless. Results, in the form of metrics, are what matter.
The world should embrace capitalism because it works. It is often described as the worst system except for every other one. It is why France, Germany, China and virtually every other nation previously mired in economic stagnation, bureaucracy and mediocrity wants to try some form of American style capitalism.
Capitalism should be the order of the day in business because it has succeeded where socialism has failed, which is virtually everywhere. Where liberty is paramount, which is again virtually everywhere, socialism should be reduced to the ash heap of history.
May the National Football League be the one place on Earth where socialism is allowed to reign supreme, because it is the one place where equality is the desired result, rendering the universally disgraced philosophy a complete success.